eBay to buy Magento, build out e-commerce platform

San Jose online auction giant eBay (EBAY) intends to acquire Magento, a Los Angeles startup that has developed an open-source e-commerce platform.

Financial terms of the agreement, announced Monday, weren't disclosed. However, eBay CEO John Donahoe said the deal would help his company build out its X.Commerce platform.

"The feedback we've heard from external developers has been clear," Donahoe said in a news release. "They don't just want payments or an e-commerce site; they want access to a full set of commerce capabilities to build complete shopping experiences for merchants."

Donahoe's company bought a minority stake in Magento in 2010. According to TechCrunch, which cited a Securities and Exchange Commission filing, Magento raised $22.5 million in equity funding at the time of eBay's investment.

Magento, founded in 2007, has more than 290 employees, according to the news release.

According to a Magento blog post, co-founder and CEO Roy Rubin and co-founder and Chief Technology Officer Yoav Kutner will continue to lead development of the Magento platform from Los Angeles, while working with eBay on X.Commerce.

"Over the past year, eBay has gotten to know our platform, our culture and our community," Rubin wrote in the post. "They have experienced the passion of the Magento ecosystem, and they are eager to harness the power of this ecosystem."

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Contact Frank Russell at 408-920-5876. Follow him at Twitter.com/mercspike.